Our View

I think we all know that these are not our fathers’ markets and charts, nor will they ever be. One thing I can say about Friday’s price action is that it was a great example of how program trading can spin out of control quickly — but the markets will have to drop a lot more to be considered a real FLASH CRASH. What I think is a better name for Friday is a micro-Flash Crash.

Late in the day, after the ES rallied, I had a feeling the decline was stalling. Had they not done that and closed on the lows, I would probably have a different opinion. But in most cases, after big-name stocks get beaten up like Oracle and Broadcom, they end up being buying opportunities.

Will that be the case today? Well, there could be some mid-month rebalancing, and Tuesday is an 85% up day.

One of the things that bothers me is I felt strongly about maintaining a long position three weeks ago when everyone was selling — and I didn’t do it. That is where the money is made, not trying to scalp.

I know from my own trading that when people start talking about December, they think it’s just going up. But the majority of the gains occur in the second half of the month. December is one of the stronger months overall for the index — average return around 1.5% since 1950, positive about 75% of the time — with the key driver of late-December strength being the Santa Claus Rally, defined as the last five trading days of December plus the first two of January. The S&P 500 has averaged +1.3% gains during this 7-day window, positive 79% of the time since 1950, often starting around late December or post-Christmas trading days.

According to Stock Trader’s Almanac:

I find it very unlikely the market will go down during these periods. Bottom line: getting bullish too early in December is generally not a wise move.

Our lean: I think we could see a bounce on Globex. What I don’t know is if the ES will just go straight back up. You can sell the early rallies and buy the pullbacks — or just be patient and buy the pullbacks.

Goldman Sachs Asset Management Makes Big Bet On ETFs Specializing In Downside Protection

Goldman Sachs Asset Management is significantly expanding its focus on defined outcome (buffer) ETFs—innovative products that employ options strategies to offer investors downside protection by buffering a portion of losses in exchange for capped upside potential. On December 1, 2025, Goldman Sachs announced its agreement to acquire Innovator Capital Management, a pioneer and leading provider in this category, for approximately $2 billion in cash and stock (subject to performance targets), with Innovator overseeing ~$28 billion in assets across 159 defined outcome ETFs as of September 30, 2025, and the transaction expected to close in the second quarter of 2026 subject to regulatory approvals. This acquisition, driven by surging investor demand for risk-managed equity exposure amid market uncertainty, high valuations, and volatility, complements Goldman’s existing buffered ETFs launched in 2025 (GBXA, GBXB, GBXC), instantly scaling its offerings so that the combined firms manage over 215 ETF strategies and more than $75 billion in assets, positioning Goldman among the top 10 active ETF providers globally. Industry analysis project defined outcome ETF assets could surpass $300 billion (with some estimates up to $334 billion) by 2030, reflecting strong advisor and investor interest in structured protection strategies, underscoring Goldman Sachs’ commitment to leading in high-growth, innovative investment categories within its $3.5 trillion asset management business.

Market Recap

After the close, Oracle’s Q2 fiscal 2026 earnings disappointed investors due to a small revenue miss: $16.1B vs. $16.2B. The miss was driven by declining traditional software sales and negative free cash flow for AI infrastructure, which fueled concerns over rising debt and delayed returns on heavy spending. Shares plunged 11%.

Right after the Oracle earnings report, Broadcom beat estimates with record revenue, but shares dropped 10% amid worries about gross margin pressure from the growing mix of lower-margin AI business, a perceived shortfall in AI backlog growth or new major customers, and slight delays in certain projects.

Despite the earnings news, the ES closed up 43.50 points on Wednesday. On Thursday, the ES traded up to 6928.75, up 15.5 points. Additionally, the NQ closed up 98 points on Wednesday. On Thursday, the NQ traded up to 25,861.50 but lost most of the gains, closing down 85.50 points.

I voiced my concern about the Fed speakers (not as many as I wrote about), but just the same, the weight of the tech and AI weakness pushed the Nasdaq and S&P sharply lower during Friday’s trade.

I’m not going to do a blow-by-blow, but here’s a quick recap: the ES made a Globex high at 6915.50 and opened Friday’s regular session at 6896.25, down -11.75 or 0.17%. It traded up to 6903.00 at 9:40 as the NQ poured lower, then sold off down to 6805.00 at 11:35. It made a higher low at 11:40, rallied 38.75 points up to 6843.75 at 12:20, pulled back to 6823.00 at 12:30, then rallied up to 6857.00 at 1:15.

From there, it sold off down to 6825.50 at 2:25, traded up to 6839.00 at 3:10, sold off again down to 6814.50 at 3:35, traded up to 6832.50 at 3:45, and was at 6827.50 as the 3:50 cash imbalance showed $3.1 billion to buy. It then traded up to 6837.25 and flatlined into the 5:00 futures close, settling at 6830.75 — down 76.50 points or 1.11%, the largest drop since November 12, 2025.

The NQ settled at 25,213.50, down 500 points or -1.94%, its worst day since the 590.25 point drop on November 20, 2025.

In the end, the longs got hoodwinked by the AI/tech weakness, as investors dumped growth/tech stocks while rotating into defensive and value areas. Utilities rose +1.8%, Energy +1.5%, and Financials +1.2%. The Dow rose +0.3% on broad participation. The move broadened market leadership, erasing -$200B in AI market cap.

In terms of the ES and NQ’s overall tone, it was like someone flipped the switch. As for the ES’s overall trade, volume was high at 2.45 million contracts traded.

In all honesty, I did not see that coming — but the PitBull warned me about a newsletter he gets that was calling for a FLASH CRASH. I got a little spooked. Did I believe it? Not really, but as the NQ and ES were falling, I started thinking it was possible. Then I started to reflect back to the May 2010 Flash Crash that cost my S&P 500 futures and options desk $9.6 million — and it didn’t really look like that.

Back then, I think the ES was down over 4% by midday and then dropped 6% from 2:30 to 2:45. The YM (Dow Jones future) dropped 600 points in 5 minutes or -9%. That’s when a hedge fund enters an order or gets out of the long-side protection of a 2,000-lot put spread, leaving the trader naked short.

From the low, and over the next 20 to 30 minutes, the market rallied sharply, recovering most of the crash losses within 20 to 30 minutes around 3:05 — regaining approximately 70% of the plunge, or +6% upward from the bottom.

While I believe there have been many ‘little’ FLASH CRASHES over the years, there hasn’t been anything like May 2010. I think it’s nearly impossible to predict the timing of a real flash crash — even if you are Michael Burry.

The Week Ahead

Key Upcoming Events (December 15–19, 2025)

Monday, December 15

Tuesday, December 16 (High-impact: Delayed labor and retail data)

Wednesday, December 17

Thursday, December 18 (High-impact: Inflation data)

Friday, December 19

Today’s BTS Levels: (Tomorrow we will switch to H26 contracts)

ES Z

The bull/bear line for the ES is at 6842.50. This remains the key pivot for today. Holding above this level keeps the near-term tone constructive, while acceptance back below would shift control back to sellers.

ES is currently trading near 6865.25, above the bull/bear line, suggesting buyers still have control in the early Globex session. As long as price holds above 6842.50, look for rotation higher rather than aggressive downside continuation.

The upper range target for today is 6898.25. Initial resistance past the upper range target exists at 6915.50, followed by a larger upside extension toward 6950.75. A sustained push through 6898.25 would open the door to testing these higher resistance levels.

On the downside, first support is the bull/bear line at 6842.50, followed by 6830.75. The lower range target sits at 6786.75. A failure to hold 6842.50 increases the odds of a deeper test into 6805.00 and potentially the lower range target.

Overall, bias remains balanced-to-bullish above 6842.50. A clean break and hold below that level would shift focus toward the lower range targets, while strength above 6898.25 keeps upside continuation in play.

NQ Z

The bull/bear line for the NQ is at 25,298.25. This is the key pivot for intraday bias and will determine whether buyers or sellers maintain control.

NQ is currently trading near 25,350.50, holding above the bull/bear line, which keeps the near-term tone constructive. As long as price remains above 25,298.25, buyers can work for continuation toward higher resistance levels.

On the upside, resistance comes in at 25,572.25, followed by 25,701.00 and the prior high at 25,733.25. A sustained push through these levels opens the door toward 25,830.25 as the next upside objective.

On the downside, initial support is at 25,213.50, with stronger support below at 25,118.00. A failure back below the bull/bear line would shift focus to 25,057.50 and then 25,024.50 as the lower range target for today. A break of that zone risks extension toward 24,766.50.

Overall, NQ remains bullish above 25,298.25. Acceptance back below that level would negate the upside structure and favor rotation toward the lower targets.

Polaris Trading Group Summary – Friday, December 12, 2025

It was a textbook Capital Preservation “FRYday”, with PTGDavid guiding the team through a well-structured, disciplined session. The day delivered a classic Cycle Day 1 (CD1) decline, hitting multiple downside targets highlighted in the Daily Trade Strategy (DTS) Briefing, and finishing with an impressive reversal that offered lessons in patience, alignment, and market rhythm.

Key Market Action & Trade Highlights:

Lessons & Highlights:

Looking Ahead:

DTG Room Preview – Monday, December 15, 2025

Macro & Fed Outlook:

Corporate & Sector Highlights:

Company Spotlight:

Today’s Calendar:

Markets & Levels:

Tone: Constructive heading into 2026 if incoming data supports Fed pause.